Born between 1980 and 2000, the millennial generation has a wide range of stereotypes attached to it. Often considered entitled by older generations and trailblazers for the upcoming ‘Linkster’ generation (the first generation to be linked into technology from day one).
But when their attention turns to the serious stuff; like planning for their future, millennials are a lot more switched on than might have been assumed.
Research from Prudential has shown that of people in the first 10 years of their working life:
- 57% factored the quality of their workplace pension into the decisions to accept a job offer
- 38% believe that their current savings and retirement plans are on track to match the quality of life of current pensioners
Whilst signalling that some millennials are giving retirement planning the serious consideration it deserves, it hasn’t all been good news lately. Aegon’s ‘Aegon Retirement Readiness Survey 2017’ has shown that the potential of workplace pensions is not being fully realised, with:
- 51% of millennials feeling that their employer does not actively encourage them to take an interest in the retirement planning
- 58% believing that their employer should bear some of the responsibility for planning for their retirement
These figures paint an interesting picture, on one hand, it seems to point to a rejection of responsibility regarding pension planning. However, the same study showed that more 18-34 years olds (30%) are actively choosing their own investment funds, compared to other age groups. Suggesting that the younger adults are more likely to want to control their assets independently.
Whilst the figures seem to contradict one another, it seems that the responsibility for retirement planning should fall to the individual.
Employers are responsible for enrolling employees and providing contributions. Ultimately though, it is down to you to make sure that your savings and planning is geared toward being able to afford the standard of life you want when you stop working.
One of the main criticisms of auto enrolment pension schemes, are that they will not provide enough to live on when it is time to retire.
In your twenties and thirties, it can be easy to brush the responsibility under the rug. Retirement is a long way away, and with the state retirement age being constantly pushed back, it might feel like you will never be able to finish working. However, giving yourself more time to save makes retirement planning much easier and gives you the ability to save even more over time.
Plus, with your own pension savings, you can retire at an age you are happy with, rather than waiting for the government’s permission.
So, how can you take control of your retirement planning now, to live the life you want, when the time comes?
- Consider cutting back: Prudential’s research shows that 31% of 18-34-years-olds are planning to cut back on non-essential spending over the next ten years to concentrate on saving for their pension
- Join a workplace pension: If you are already enrolled in a workplace pension, make sure that you know how contributions work and how much you are putting into your pension; and crucially, how much you will get back
- Relocate to a less expensive area: 30% of 18-34-year-olds are considering relocating to an area with cheaper living costs so that they can invest more money into their pensions. This is not always necessary or practical, but if it suits your circumstances, it can be effective
- Take professional advice: It is never too early to get professional financial advice. In fact, the earlier you start to consult an adviser, the more effective your plan will be and the longer you will have to make the most of your working life income. 29% of 18-34-year-olds believe that consulting a financial adviser will help them to understand their options and finances better.
- Keep yourself up to date: Knowledge is power; knowing the numbers behind both your state and workplace pensions will mean that you can keep on top of your contributions and keep your savings on track.
Your pension is no-one’s responsibility but your own. Take the time now, to get your financial planning on track to secure the future you deserve. Contact us for advice.
Workplace Pension are regulated by The Pensions Regulator. A pension is a long-term investment. The fund value may fluctuate and can go down as well as up.